Buoyant market gets a run for its money
THE sharemarket had a solid run this week, closing just shy of the 4500-point level after the Reserve Bank's rate cut and then rising global commodity prices saw investors jump into financial and resource stocks.
THE sharemarket had a solid run this week, closing just shy of the 4500-point level after the Reserve Bank's rate cut and then rising global commodity prices saw investors jump into financial and resource stocks.The benchmark S&P/ASX 200 Index hit a 14-month high on Wednesday, and then extended those gains over the next two days to be up 2.4 per cent for the week.It has now risen for seven days in a row, its longest winning streak since April 2010.The week saw investors react to Tuesday's interest rate cut by putting money in high-yielding financial stocks, while on Friday they responded to high commodity prices by embracing resources stocks, which rose nearly 2 per cent.Gold prices overseas hit nine-month highs of $US1796.50 an ounce on Thursday night.Meanwhile, Australia's dollar lost a cent against the greenback through the week, a direct consequence of both the RBA's rate cut and disappointing retail sales and building approval figures."Those last two numbers were a setback," Westpac currency strategist Sean Callow said."We had a big revision to building approvals, and the details of the retail sales weren't very encouraging."For the week, the four big banks rose after the RBA's rate cut. ANZ rose 75?, or 3 per cent, to $25.50 Commonwealth Bank climbed $1.08, or 2 per cent, to $56.85 National Australia Bank rose 82?, or 3.2 per cent, to $25.49 and Westpac climbed $1.03, or 4 per cent, to $25.88.After the RBA's rate cut of 25 basis points, NAB and Commonwealth Bank yesterday reduced the interest rates for their standard variable home loans by 20 basis points.Westpac later cut its standard variable rate by 18 basis points.Meanwhile, the Bank of Queensland slipped 3? to $7.55, preparing to post the first full-year loss by an Australian bank in 20 years, thanks to its exposure to the struggling south-east Queensland property market.Qantas gained 3?, or 2.5 per cent, to $1.25 after the airline sold its 50 per cent stake in the road freight operator StarTrack to Australia Post and then moved to take full ownership of Australian Air Express. The High Court also ruled against the airline's fight to be exempt from paying $34 million in GST on unused flight bookings.Macquarie Radio Networks fell 9?, or 14 per cent, to 55? as the list of sponsors pulling out of broadcaster Alan Jones' radio program continued to grow because of his comments about Prime Minister Julia Gillard's father.Arrium jumped 25.5?, or 47 per cent, to 64.5? after it said it had rejected an unsolicited $1 billion takeover offer from a consortium of Australian and Korean companies.It also said it expected total export iron ore sales to reach between 8 million and 9 million tonnes for fiscal 2013, as the port capacity at Whyalla increased from 12 to 13 million tonnes.